Foreign direct investment in developing countries

Foreign Direct Investment (FDI)is one of the crucial factors of economic growth, in particular in the developing countries. Relatively low savings rate in those countries increase the need for FDI. Due to the lack of own capital, FDI becomes an important accelerator of initiating economic growth. In the conditions of the world economy, development differentiation creates the possibility to use foreign production capital and constitutes a significant factor allowing the decrease of development disproportions. Changes proceeding in the world economy contributed to pace acceleration of FDI inflows on the global scale. What is more, also participation of the developing countries in the world foreign investments increased. However, statistical data confirms that participation of the developing countries in FDI is set out uneven. The considerable part falls on Asia and Latin America. Particularly difficult seems to be the situation of African countries where recently an increase of foreign investments may be observed, however, still remains at relatively low level. It shall be remembered that the influence of FDI on economy relates not only to the benefits. It may also be accompanied by negative consequences. In order to avoid them, the country shall abide some rules concerning non-discriminating of domestic investors. The investments shall also constitute only a supplement of narrow internal accumulation. The aim of the present discourse is the analysis of the sizes and directions of FDI as well as causes of their low level in the developing countries. The article also pays attention to the recommendations that shall be introduced and which may lead to the improvement of the situation.